Abercrombie & Fitch to close up to 50 stores in the U.S. following weak sales during the holiday season

Teen retailer Abercrombie & Fitch said Friday it plans to close 40 to 50 of its U.S. stores this year as the company’s shares took a nosedive following lukewarm sales over the holiday shopping season, a crucial time for retail chains.

Comparable store sales at Abercrombie’s U.S. stores fell 1 per cent in the fourth quarter, furthering previous declines in the company’s selling power.

Shares of Abercrombie tumbled 4.5 per cent on Friday after the announcement was made.

Store closings: Abercrombie & Fitch said it plans to close 40 to 50 of its U.S. stores this year as the company¿s shares took a nosedive following lukewarm sales over the holiday season

The Ohio-based retail company’s chief executive Mike Jeffries told analysts during a conference call on Wednesday that Abercrombie would ultimately close 180 of its underperforming U.S. stores - the ones hidden away in barren malls - by 2015.

Last year, the struggling retailer closed 71 of its U.S. stores, including 68 during the busy holiday season.

‘Our profitability is not where it needs to be,’ Jeffries said as he highlighted ‘a challenging U.S. retail environment over the holiday period.’

Abercrombie, known for its clubby in-store music and racy marketing campaigns, is looking to boost its brand image and revitalize its profit margins by closing the weaker stores. The company did not specify where the new closures will occur.

On a positive note, the company said direct sales to U.S. customers, which include e-commerce sales, rose 5 per cent. But those sales remain a small part of the teen retailer's overall business.

Previous closings: Last year, the struggling retailer closed 71 of its U.S. stores, including 68 during the busy holiday shopping season

In an attempt to offset slow growth in the U.S., Abercrombie has made a big push in overseas operations.

But the company’s international segment performed even more poorly than its domestic stores, with comparable store sales down 14 per cent overseas.